The Bloor Perspective: Offshoring, those DPA emails and Oracle 10g

Although outsourcing of IT services to offshore suppliers is in its early stages, the indications are that this activity will grow rapidly. Just as Japan's car and other manufacturing industry decimated the US auto industry in the 1970s so we can expect India and other countries closer to home to generate new competition to UK IT service companies. Major changes will be needed to meet this new challenge.

The strengths of the offshore suppliers are becoming well known - low cost, good quality and a high level of customer service based on an almost limitless supply of well-educated low-cost graduates. Offshore suppliers are changing the terms of competition in IT services and change is not an option but a necessity for UK IT service companies.

The first step is not to overestimate the threat - concerns about offshore companies are often out of proportion to their market share. If you put yourself in their shoes, you can see the difficulties of tackling a foreign market with a range of both large and small competitors, well entrenched with local expertise and strong client relationships. The outsourcers' cost advantages are not as dramatic as anecdotal tales suggest.

Offshore outsourcers face stiff challenges but they are also learning fast and we have to learn even faster to keep ahead. The IT industry prides itself on its ability to master new technologies and accept rates of change that would dismay workers in other sectors. We have to use these skills to adapt and thrive in a new environment where software development costs are a lower proportion of the total contract cost.

If we are to change the way that we add value we have to make the most of our knowledge advantages by:

1. Exploiting our understanding of a client's business and culture and paying close attention to customer needs. We need to be experts at using collaboration tools to work closely with customer - you can be sure that offshore suppliers will be doing this to overcome their geographic disadvantage.

2. Keeping ahead of the offshore developers by using collaboration to support partnerships that address application and technology niches and build efficient consortia.

3. Reducing costs and making the best use of scarce resources by using teleworking to manage virtual teams.

When an industry experiences new competition, it has two choices - to make radical changes or to go into a graceful decline. IT service organisations have the flexibility to survive and thrive if they accept the challenge of changing the way they operate.

*Data protection cons*

The OFT has responded to many complaints received about misleading advertisements for ‘notification services’ - associated with the Data Protection Act, 1998 - by obtaining an interim injunction order from the High Court, against a Mr Christopher Yewdall. The injunction prevents Mr Yewdall accepting payments, received after 8 August 2003, in response to such advertising.

Mr Yewdall was involved in placing the misleading adverts under various names : 'Data Protection Agency', 'Data Protection Agency Registrations', 'Data Protection Agency Services', 'National Registrations', 'Data Protection Registration' and 'Data Protection Registration Services'.

All the aforementioned 'organisations' gave the impression of being an official body and that businesses receiving their correspondence were under a legal obligation to register through the sender at a notification cost of £95. Furthermore, they didn't adequately explain the notification exemptions available under the Act.

To clarify, the DPA, 1988 requires businesses which hold and process personal data to notify the Information Commissioner, specifying various types of classification - unless an exemption applies. It is a process which can be completed directly at a cost of only £35.

If you feel that an advertisement is misleading, then make a complaint to the OFT. To be construed as 'misleading' the ad must actually deceive or be likely to deceive the recipient and effect their economic behaviour. In addition, it must be published in connection with a profession, business, trade or craft in order to promote the supply or transfer of goods or services, immovable property, rights or obligations.

Most ads confirm to legislative regulations and industry codes of practice. But as the above illustrates, let's root out those that seek to deceive and exploit. Do not just ignore them.

*Oracle 10g – no lightweight*

The new release of the Oracle database, Oracle 10g, is probably the most comprehensive upgrade that Oracle has yet delivered. It bears comparison with the version 7 release, which established Oracle as the leading database vendor.

The g in 10g stands for grid. A grid is a network which is managed as a single resource and it is applying the concept not just to its database but also to its application server and to storage management.

ASM stands for automatic storage management. The database takes control of the disk resource, and automatically stripes data across the disks in one megabyte chunks. This has the effect of randomly distributing data over a set of disks and hence increasing the average speed of disk reads and writes.

In addition ASM integrates mirroring and removes the need for third-party volume management. In effect there are no disk volumes, just a pool of disk storage that is optimised for retrieval. When new disks are added to the pool, ASM automatically re-balances the distribution of data. Apart from improving performance, ASM reduces labour costs by reducing the need for database tuning and automating changes to the storage pool. It has been designed to work with most SANs and with NAS.

In the latest release, Oracle will allow you to define a grid and add servers to it or remove servers from it. Within the grid Oracle will manage the workloads based on pre-defined priorities, carrying out automatic re-allocation in the event of hardware failures and managing disaster recovery should the worst come to the worst. The database has been enhanced for RAC.

Oracle is claiming that its approach to grid computing will reduce resource management costs dramatically - by over 50 per cent.

But 10g is by no means just about grid. In particular, the company has added substantial additional features to provide improved database performance, high availability, and easier and more comprehensive management features.

There are also a wide range of new features and upgrades supporting the use of Oracle within a data warehousing environment.

Finally, it is worth making a few points about manageability in other areas. Oracle has introduced very sophisticated automatic storage management and has fully automated back-up and recovery. Especially useful is the new flashback capabilities, which should significantly improve recovery times.

It has also reduced the time needed for installation, creation and configuration, and it has simplified its management of RAC by introducing an improved single-system image. Indeed Oracle appears to have done a detailed analysis of an Oracle DBA's job and tried to fully automate or increase the level of automation of every part of it.

In conclusion, 10g looks like an impressive step forward in database technology. Last week we discussed how IBM (then in the dark about the new features in 10g) proposed to combat the menace posed by its major competitor's new product. In our view, what it proposed then will have to be completely re-thought: the new management and performance features in 10g undermine what it had intended to say, which will not wash. The problem for IBM is that there are now only very few areas where IBM has any sort of a lead over Oracle. We guess we'll have to look to the next release of DB2.

Bloor Research is a leading independent analyst organisation in Europe. You can find out more at www.bloor-research.com or by emailing mail@bloor-research.com.